Douglas Roberts Dimick

China Continues Downward Revisions

Michael,

I moved to China in March 2006. During the past two years of research for my book (Foreign Capital Investment Banking for China), I found mostly indirect evidence that "safeguards" are systemic or symbiotic -- more like symbolic -- within this "constitutionalized" quasi-feudalistic system of governance.

Money and rules: neither of which exist here as doctrinal constructs so transposed and codified. Currency is restricted based on fiscal and political selectiveness relative to monetary metrics; rule of law is subjugated to prevailing political doctrine(s).

Your implied call for accountability is based on a common sense mandate for maintaining social harmony -- as to who can stomach what and how much around here, right?

How ironic... Common Sense.

During September, while reducing my 630 page text to the publisher's requested 200 page limit, I found myself frequently reflecting upon undergraduate and juris doctorate studies of the Federalist Papers. I am considering whether we here are now there...

Hu et al may usher in an era establishing rule of law via codification of Federalist precepts as conditions precedent for provinical allocations of (or block) funding.

How? Just as we did at varying times of our American story... with money.

Why should there be details about how much stimulus as well as where and when and to whom? Let those provincial "little emperors" feel the heat of local discontent -- just enough so they are pliable when it comes to rule of law stricture being mandated from upon a mantle of entitlement theory.

Central planners are neither constitutionally constrained to act here based on provincial rights nor politically franchised to finance a subordinated guanxi-system of micro-development programs. Tax rebates and credits directed to natural and corporate citizenry are perhaps more efficient if not directly effective measures for stimulus.

The "Feds" do it to the states. In tern, the states do it to the counties and municipalities. Why get creative?

Central government planners have an opportunity here. Hopefully, this opening window in China's evolution will not be screened for only fiscal accountability and inspector general audits.

Does power of the purse support such a lofty pursuit? To wit: advance openness and reform for all Chinese people as well as us, those foreign guests who have vested hopes for a world-integrated partner that shares similar values -- as well as a liberated currency defended by fixed principles of law.

Given your vantage point, I am curious...

dr